Janice Lozano
The bar exam is a crucial step for aspiring lawyers, but it can be costly. Fortunately, there are bar exam loans available to help finance this transition from student to practicing attorney. These loans are specifically designed to cover exam fees, prep courses, and living expenses during this period. They are distinct from personal and traditional student loans, as they serve a singular purpose: to facilitate the bar exam process. While they often carry higher interest rates, they are a viable option for those seeking financial support to take the bar exam.
| Characteristics | Values |
|---|---|
| Purpose | To cover the costs of bar exam prep, the bar exam itself, and living expenses while preparing for the bar |
| Interest rates | Variable, may be higher than student loans |
| Eligibility | Students enrolled at least half-time in their final year of study at an ABA-accredited law school or have graduated from one within the last 12 months |
| Repayment options | Immediate repayment of principal & interest, interest-only payments while in school, full deferment of principal & interest until six months after graduating |
| Grace period | Varies by lender |
| Minimum and maximum amounts | Varies by lender |
| Application process | Apply directly with the lender or bank, provide proof of identity and citizenship status if required |
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What You'll Learn
Bar exam loan eligibility
Bar exam loans are private loans that cover the costs of bar study courses, exam fees, and living expenses while you prepare for the bar exam. They are different from federal and private student loans because they are not disbursed to your school.
To be eligible for a bar exam loan, you must be enrolled at least half-time in your final year of study at an ABA-accredited law school or have graduated from one within the last 12 months. Students should be scheduled to sit for the bar exam within 12 months of their graduation date.
- Sallie Mae: You can borrow from \$1,000 up to \$15,000 with no origination fees or prepayment penalties. You can choose from a variable or fixed interest rate and also request a cosigner release if needed. U.S. citizens and U.S. permanent residents can apply with or without a cosigner. All others must apply with a cosigner who is a U.S. citizen or permanent resident and provide an unexpired government-issued photo ID to verify their identity.
- Citizens: You can borrow up to \$16,000 with no origination fees. You can choose from variable or fixed interest rates and select from different repayment options.
- College Ave: Offers a choice of repayment terms ranging from one to five years.
It is important to note that bar loans typically have high-interest rates compared to student loans and usually cannot be included in student loan refinancing. Therefore, it is recommended to skip bar loans if possible and consider alternatives such as scholarships, employer reimbursements, and federal student loans.
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Bar exam costs
The cost of taking the bar exam varies depending on the state and whether you are a first-time taker, retaker, or attorney. Fees for first-time takers range from $100 to over $1,000, while fees for attorney applicants are typically higher. For example, in Oregon, first-time takers pay $750, attorneys pay $1,175, and repeaters pay $750 if not admitted in another jurisdiction or $1,125 if admitted. In Alabama, the fee is $575 for first-time takers, attorneys, and repeaters. In Delaware, first-time takers pay $700, attorneys pay $800, and repeaters pay $700. In Florida, first-time takers pay $1,000, attorneys pay $1,600 to $3,000 depending on time in practice, and repeaters pay $450. In Georgia, the fee is $442 for first-time takers, $378 for attorneys, and $442 for repeaters. In Pennsylvania, the fee is $650 for first-time takers, attorneys, and repeaters. In addition to these base fees, there may be separate charges for laptop use, software fees, character and fitness (C&F) assessments, background checks, and Multistate Professional Responsibility Examination (MPRE) registration. These additional fees can range from $50 to $200 for background checks and $100 to $150 for laptop use.
Beyond the cost of the bar exam itself, there are also costs associated with bar exam preparation, including bar review courses, study materials, and travel and accommodation expenses. Bar review courses can range in cost from $1,000 to over $4,000 and include materials like practice exams, study guides, and exam-level questions. Some providers offer more affordable options, such as the Quimbee Bar Review, which starts at $1,199.
To cover these costs, some students may consider taking out bar loans, which are private loans specifically for bar study courses, exam fees, and living expenses while studying for the bar. However, bar loans typically have high-interest rates compared to student loans and cannot be included in student loan refinancing. As such, it is recommended to skip bar loans if possible and pay them off quickly if taken. Students can also explore scholarships, grants, and employer support to help cover the costs of the bar exam and preparation.
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Bar exam loan alternatives
Bar exam study loans are private loans that cover bar exam fees, exam preparation courses, and living expenses. While they can be useful, they are an additional debt to be repaid and often have high-interest rates. Here are some alternative options to consider:
Scholarships
Scholarships are a great option to fund your bar exam preparation. Many state bar associations offer scholarships with various criteria, including academic achievement, financial need, and community involvement. Start by searching for scholarships in your state, and don't forget to check with your law school's financial officer and local board of bar examiners for advice and resources.
Employer Reimbursements
Many law firms, especially those in Big Law, reimburse bar exam fees and prep courses for their newly hired lawyers. Some firms may also offer bar stipends, starting bonuses, or salary advances. If you have already secured a job, consider discussing these options with your employer.
Federal Student Loans
Federal student loans, such as Grad PLUS loans, can help cover the costs of bar exam preparation. These loans often have higher borrowing limits and may be a better option than private bar study loans.
Work While Studying
Although it may be challenging, some people choose to work while studying for the bar exam. This can help cover living expenses and reduce the need for additional loans.
Personal Loans
Traditional personal loans may offer a cheaper alternative to bar study loans. Compare interest rates and terms from various lenders before making a decision.
Remember to carefully consider your financial situation and seek advice from financial professionals before committing to any loan or alternative funding option.
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Bar exam loan interest rates
Bar exam loans are private loans that cover the costs of bar study courses, bar exam fees, and living expenses while studying for the bar. They are different from federal and private student loans because they are not disbursed to the school.
Bar study loans typically have low maximum loan amounts compared to other student loans. They also carry high-interest rates and don't come with the flexible repayment and forgiveness options that federal loans do. Therefore, it is recommended to avoid bar study loans if possible. Instead, it is advisable to use savings, income from work, or a low-interest loan from family to fund bar exam preparation.
If you must take out a loan to fund your bar exam preparation, it is essential to compare rates and terms from multiple lenders before applying. Bar exam study loans may have fixed or variable interest rates and loan terms of 5, 10, 15, or 20 years. Variable interest rates may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR).
To obtain the lowest interest rates, borrowers typically need to make full principal and interest payments, have the shortest loan term, and have a high credit score or a creditworthy cosigner. A cosigner guarantees repayment of the loan if the borrower stops making payments, and their backing may help secure a lower interest rate. Additionally, many lenders offer interest rate deductions when borrowers sign up for autopay.
Some lenders that offer bar exam loans include Sallie Mae, Citizens, College Ave, and PNC. For example, with Sallie Mae, borrowers can choose between variable or fixed interest rates and request a cosigner release if needed. Citizens also offers variable or fixed interest rates and different repayment options for their bar exam loans.
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Bar exam loan repayment options
Bar exam loans are private loans that cover bar study courses, exam fees, and living expenses. They are different from federal and private student loans because they are not disbursed to the school. These loans usually have high-interest rates and cannot be included in student loan refinancing. Therefore, it is recommended to pay them off quickly.
Repayment Options:
- Lower, interest-only payments: You can request to make lower, interest-only payments for the first 2 or 4 years of repayment. After that, you will make full principal and interest payments.
- Auto-pay discount: A 0.25% auto-pay interest rate reduction can be applied if a valid bank account is designated for required monthly payments.
- Early repayment: If you have extra money from your loan, you can get a head start on paying back your loan, which could help lower your interest payments over time.
- Refinancing law school loans: Refinancing your law school loans may free up cash to pay off the bar loan more quickly. However, this option is not suitable if you plan to use federal income-driven repayment plans or loan forgiveness programs.
- Employer support: Many law firms, especially those in Big Law, reimburse bar exam fees and prep courses. They may also offer bar stipends, starting bonuses, or salary advances.
- Scholarships: You can apply for bar preparation scholarships based on your location, legal field, and minority status.
- Leftover federal student loans: If you have graduated, you cannot take out new student loans, but you can use any leftover money from your law school loans.
- Work while studying: You can also work while studying for the bar exam to cover some of the costs.
- LIPP program: The LIPP program at Harvard Law School will cover a bar exam loan of $15,000 or less. Students can apply to a loan program with a 10-year repayment term to maximize their LIPP benefit.
It is important to note that if you don't pass the bar exam, you will still be required to pay back your loan with interest. Additionally, missing payments may cause your account to fall into delinquency or default. Therefore, it is essential to evaluate your anticipated monthly loan payments and expected earnings before taking out a loan.
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Frequently asked questions
Bar loans are private loans that help law students cover the costs of bar study courses, bar exam fees, and living expenses. They are different from personal loans and traditional student loans as they only serve the purpose of financing bar exam-related expenses.
To be eligible for a bar exam loan, you must be enrolled at least half-time in your final year of study at an ABA-accredited law school or have graduated from one within the last 12 months. You should be scheduled to take the bar exam within 12 months of your graduation date.
The interest rates for bar loans vary across lenders. Some lenders offer interest rate deductions when you sign up for autopay. It is recommended to compare rates across multiple lenders before choosing a bar loan.
Some alternatives to bar loans include scholarships, grants, and personal loans. You can also consider federal Grad PLUS Loans, which may help cover bar exam costs. Additionally, many law firms reimburse bar exam fees and offer bar stipends or starting bonuses.
